Forecasting the income statement

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Reference no: EM13976566

Income Statement Hermann Industries is forecasting the following income statement: Sales $4,000,000 Operating costs excluding depreciation & amortization 2,200,000 EBITDA $1,800,000 Depreciation and amortization 320,000 EBIT $1,480,000 Interest 280,000 EBT $1,200,000 Taxes (40%) 480,000 Net income $720,000 The CEO would like to see higher sales and a forecasted net income of $1,368,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 13%. The tax rate, which is 40%, will remain the same. What level of sales would generate $1,368,000 in net income? If necessary, round your answer to the nearest dollar at the end of the calculations.

Reference no: EM13976566

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